EFFECTS OF ESCALATION ON THE NORTH VIETNAM ECONOMY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78T02095R000800030014-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 10
• Document Creation Date: December 15, 2016
• Document Release Date: October 31, 2002
• Sequence Number: 14
• Publication Date: April 3, 1967
• Content Type: REPORT

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Effects of Escalation on the North Vietnam Econo
I. Remaining Targets in North Vietnam
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Table 1 lists
targets
other significant targets which have
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either not been struck or struck with neglibible damage through March 1967.
Important industrial targets have only recently come under attack. Although
the Thai Nguyen Iron and Steel Complex was bombed repeatedly in March, the
Hanoi Machine Tool Plant, Viet Tri Chemical Plant, Haiphong Cement Plant,
and other important fertilizer, textile, coal processing, and food processing
facilities remain unattacked. However, attacks on four thermal power plants
in February and March of this year left only three major thermal power
sources -- all in Hanoi and Haiphong -- undamaged in North Vietnam.
Only 45 percent of ~argeted bridge capacity has been destroyed
(excluding bypasses); many of the uninterdicted bridges are located on the
important Hanoi-Lao Cai and Hanoi-Dong Dang Rail Lines, and on roads leading
toward Hanoi from the China border. of North Vietnam's major jet
airfields have-rz, been struck. Less than one quarter of rail yard, railroad
shop, canal lock, maritime port, and critical communication facility capacity
has been interdicted. In addition, significant shares of military supply and
ordnance depot/, barracks, naval base, and radar site capacity are still in
operation.
II. Economic Effects of Escalated Air Attacks
A. Destruction of Modern Indus
Destruction of modern industry in North Vietnam would not deal a
crippling blow to the economy. Successful attacks upon the North Vietnamese
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industrial facilities shown in Table 1, plus additional attacks against
Vietnamese power plants and the Thai Nyugen Iron and Steel Complex, would
eliminate, however, the fruit of several hundred million dollars in capital
investment, cut off the souree of perhaps one quarter or more of the gross
national product and most foreign exchange earnings, and would probably halt
the construction of additional modern plants in North Vietnam by other
Communist countries. It would also disrupt the functioning of other sectors
of the economy through the loss of electric power and such materials as
cement, some fertilizers and chemicals, add to the burden of aid from the
Communist countries, and produce at least temporary displacement of the urban
labor force.
Modern industry in North Vietnam -- machinery, chemical, fertilizer,
cement, and electric power plants -- makes a contribution to the military
capability of the Communist forces in South Vietnam and to the air defense
capability in the north, but this contribution is not vital. Furthermore,
the essentially agarian nature of the economy together with numerous local
and handicraft facilities, which meet about 70 percent of, the population's
demand for consumer goods, provides ,a strong buffer against bombing attacks
causing a general economic collapse. The major effect of escalated attacks
against industry in North Vietnam would be to place an additional burden on
port and rail facilities in order to import goods formerly produced domestically.
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B. Imports Versus Rail and Port Capacities
Although the precise nature of the import program that would follow
a successful attack against modern industry is uncertain -- the North
Vietnamese would not have to replace some non-essential output -- it is
estimated that the required level of annual imports could increase by as
much as 500,000 metric tons. The estimated increase in imports is assumed
to include sufficient cement, fertilizer, pig iron, machine tools, spare
parts, medicines, and the like to replace essential production for domestic
consumption.
Total imports by North Vietnam during 1966 are estimated to have been
about 1.5 million metric tons. Daily requirements are given in the following
tabulation in metric tons per day.
Dry cargo through Haiphong 2,390
Rail imports 1,150
Bulk petroleum 510
Total 4,110*
*Includes a small volume of imports through Hon Gai.
An additional increment of 500,000 metric tons of imports above the 1966
level -- 1,370 metric tons per day -- is within the current capacity of the
rail lines (see the tabulation below) without recourse to road or sea
transportation.
Metric tons per day
Railroad capacity between China and Hanoi
(each way per day)
3,600
Rail imports during 1966
1,150
Replacement Increment
1,370
Total
2,520
Unused capacity
1,080
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The port of Haiphong also has a theore/tical capacity of about 4,500
metric tons of dry cargo per day. Almost all of the port's capacity could
be used for imports because the availability of exports would be virtually
eliminated by a successful escalation of the bombing. As shown below,
imports at the level during 1966 plus the additional burden of imports
resulting from the destruction of modern industry are within the port's
theore%tical capacity.
Metric tons per day
Haiphong Port capacity
4,500
Imports during 1966
2,390
Replacement Increment
1,370
Total
3,760 J 4 't,
Unused capacity 740
An escalated level of air attacks against both the rail and highway
targets listed in Table 1, if successful in interdicting the main LOC's
from Communist China, however, would place a heavy burden on the port of
Haiphong. Such an attack would force the North Vietnamese to shift a large
portion of the 1,150 metric tons of supplies currently imported by rail to
sea transportation. It is quite possible that the North Vietnamese could
move imports through Haiphong at the theore/tical capacity level after the
initial disruption caused by the bombing with foreign guidance and additional
cargo-handling equipment, although some congestion already has been noted at
the port. Therefore, as much as 60 percent of the supplies currently imported
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by rail probably ,,,gc a t be shifted to sea tranportation,% ,The ports would still
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to the loss of industry. The remaining imports currently moved by rail,
including most military supplies, probably could be transported by truck and
by.rail shuttle service in spite of escalated attacks against both highways
and railroads.
In-order to relieve port congestion, some seaborne imports can be off-
loaded from ships anchored outside the port area into barges, lighters, and
other small watercraft without using the port's facilities, as is currently
being done for petroleum in bulk. Some imports also can be moved from South
China ports by junks and other coastal watercraft and off-loaded at several
smaller ports in North Vietnam or "on the beach" like that currently being
done in the southern part of the country. Thus, although a successful
escalation of the bombing against LOC's would createserious problems for
the North Vietnamese, it probably would not significantly restrict the
normal volume of imports as long as the ports and waterways remain open. At
any rate, the North Vietnamese would have little difficulty importing all
essential economic and military supplies.
C. Further Escalation: Mines and Airfields
A successful escalation of .air attacks in conjunction with an effective
mining program would place a much greater restriction on the North Vietnamese
economy than escalated bombing by itself. Such a program would be especially
effective if, in addition to the ports, coastal and inland waterways were
mined. The vulnerability of railroad rolling stock, trucks, and watercraft,
the difficulties of maintaining lines of communication, and the cost and
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unreliability of transportation would all increase significantly. Some import
programs would almost certainly have to be reduced and some reduction in the
desired levels of supplies would take place. These problems alone would not
be sufficient, however, to degrade meaningfully the flow of vital economic
supplies or essential military materials, and would not prevent North Vietnam's
continued support of the war in the South. The volume of essential economic
and military supplies is relatively small and North Vietnam could continue
to move this reduced flow on highways and rail lines in spite of escalated
air attacks.
Air attacks against North Vietnam's remaining airfields, see Table 2,
would blunt the country's air defense capability but would have no serious
effect on the flow of supplies. Air transportation in North Vietnam has
always been negligible compared to other forms of transportation. The most
significant effect would be to restrict the USSR or China from providing an
airlift of priority supplies.
Escalated attacks against the remaining unstruck barracks and military
storage depots listed in Table 1 would probably be of no, great significance
because dispersion of these facilities could be increased without serious
difficulty.
D. Manpower Requirements
At present about 220,000 full-time and 100,000to 200,000 part-time
workers have been diverted to repair, reconstruction, dispersal, and transport
programs. Of these the tabulation below shows the estimated number of
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workers directly engage in road and rail construction, maintenance, and
repair.
South of Hanoi North of Hanoi Total
North Vietnamese 63,000 9,000 72,000
Chinese 0 22,000-34,000 22,000-34,000
Total 94,000-106,000
An intensive interdiction of the main rail lines and highways in the areas
north of Hanoi would force the Communists to allocate considerable manpower
to maintain the rail lines and alternative highway routes. Although it is
extremely difficult to interdict road systems, their greater use would increase
the opportunities'for harassment of actual traffic movement.
If the present level of air strikes is doubled and an increasing share of
the attacks are concentrated against the transportation system north of
Hanoi, it is estimated that an additional 40,000 North Vietnamese and 13,000
to 16,000 Chinese would be required for repair and maintenance operations.
It is probable that a major escalation in air attacks against the LOC's
in the north would result in more Chinese construction troops being assigned
to North Vietnam. At present a division of labor already exists with North
Vietnamese labor repairing the main.LOC's in southern North Vietnam and
Chinese construction troops being largely responsible for the repair and
maintenance of the main rail lines north of Hanoi. The increased use of
Chinese troops would not be the` result of any overall manpower shortage in
North Vietnam but would result from the increased efficiency that could be
attained by using experienced railroad engineering units.
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Assuming that North Vietnam's modern industry suffered only light to
moderate damage from air attacks an additional 10,000 to 25,000 persons,
including several thousand technicians from other Communist countries, would
be necessary for repair activities. On the other hand, if modern industry is
heavily damaged then industrial repairs would probably be postponed-indefinitely.
III. Ability to Accomodate
While severe damage to the modern industrial sector and an accelerated
interdiction of the rail and road systems would place additional pressure on
Hanoi, the burden would not be heavy enough to make the regime negotiate. If
in addition the ports are successfully interdicted the North Vietnam leadership
would have cause for serious concern. Their reaction would depend on the
effectiveness of the total US program to interdict war and essential economic
supplies flowing into North Vietnam.
It would seem certain that Hanoi would continue its attempts to
circumscribe the effectiveness of they interdiction and raise the price, in
terms of aircraft and pilots, that the US would have to pay to achieve and
maintain a significant level of interdiction. In the face of heavy air
strikes during the past two years, the North Vietnamese have constructed an
average of two by-passes around all important bridges and as many as four
or five by-passes around critical choke-point bridges. In many areas the
intensity of air strikes would have to-be increased by at least three times
just to destroy the existing by-passes. In some respects, the North Vietnamese
are in a better position today after two years of bombing to maintain logistical
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flows than after the first year of bombing.
To further reduce the effectiveness of interdiction the regime could out
back on imports of fertilizers, cement, and other non-essential goods to ease
the task of importing war and war supporting supplies. In addition, without
a modern industry to support and with the elimination of exports, the transpor-
tation sector of the economy would be primarily concerned with importing and
distributing the relatively small volume of e:..-:ntial military and economic
goods. It is questionable if the interdiction of supplies into North Vietnam
can ever be so complete and continuous to reduce the volume below the threshold
needed to continue the war.
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